Description of this paper

You have an opportunity to invest in a deal that will make yearly payments forever.

Description

solution


Question

You have an opportunity to invest in a deal that will make yearly payments forever. These payments will grow at a rate of 5% per year. You will receive your first payment of $2,000 one year from today. Due to the risks associated with this investment, you will require a return of 10%. How much are you willing to pay for this deal today?

 

Paper#28316 | Written in 18-Jul-2015

Price : $17
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